2021 (8) TMI 1061 - AT - Service Tax

Refund of CENVAT Credit - export of services - eligibility to avail credit of service tax before registering the premises - HELD THAT - In the present case the refund claim is filed for refund of the credit availed on service tax paid on input services. Though the ld. AR has contended that one year has to be computed from the relevant date it is not submitted as to which is the relevant date for computation of one year. Section 11B of the Central Excise Act defines relevant date in the context of payment of Central Excise duty and not in the context of service tax. In respect of export of services para 3(b) of the Appendix to N/N. 5/2006-CE (NT) requires an application for refund of CENVAT credit must filed along with a copy of the invoice and a certificate from the bank certifying realization of export proceeds. Therefore it is impossible to file a refund claim before realization of export proceeds. Therefore in the case of export of services the relevant date would be the date of realization of consideration. Though the original authority has rendered a finding that the refund claim is hit by time-bar such finding is not supported by any reasons and there is no discussion as to the computation made by him for arriving at the conclusion that the refund claim is hit by time-bar. As per notification itself it can be seen that the refund claims are filed in each quarter. The contention of the learned AR that when computed from the first day of relevant quarter the claim is beyond one year cannot be accepted since section 11B stipulates that the period of one year has to be computed from the relevant date and the relevant date is also explained in the said section. There are no reason for holding that the claim is barred by limitation. The Commissioner (Appeals) has rightly sanctioned the refund to the assessee - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility of the assessee to avail credit of service tax before registering the premises.
2. Consideration of the issue of limitation for filing refund claims under Rule 5 of CENVAT Credit Rules, 2004.

Analysis:

Issue 1:
The appeal revolved around the eligibility of the assessee to avail credit of service tax before registering the premises. The Tribunal, in a previous final order, followed the judgment of the Hon'ble High Court of Madras in a specific case, emphasizing that registration of the assessee's premises is not a prerequisite for claiming a refund of credit under Rule 5 of CENVAT Credit Rules, 2004. The Tribunal upheld the order of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue. However, the Hon'ble High Court remanded the matter to consider the issue of limitation for filing refund claims, stating that the issue was not adequately addressed by the Tribunal in the previous order.

Issue 2:
Regarding the issue of limitation for filing refund claims, the respondent had filed two refund claims under Notification No. 5/2006-CE (NT) dated 14.3.2006. The original authority rejected the refund claims on the grounds that they pertained to a period before registration and were time-barred under section 11B of the Central Excise Act, 1944. The Commissioner (Appeals) relied on a decision that stated limitation under section 11B did not apply to refund claims filed under Rule 5 of CENVAT Credit Rules, 2004. However, the Hon'ble High Court of Madras had reversed this decision, emphasizing that the limitation clause under sec. 11B of the Act must be satisfied. The Tribunal analyzed the relevant dates for computation of the one-year period for refund claims, considering the context of service tax and export of services. The Tribunal found that the original authority's conclusion that the refund claims were time-barred lacked supporting reasons and proper computation. Ultimately, the Tribunal upheld the Commissioner (Appeals)'s decision to sanction the refund to the assessee, dismissing the appeal filed by the Revenue.

In conclusion, the Tribunal dismissed the appeal, emphasizing that the claim was not barred by limitation and that the Commissioner (Appeals) had correctly sanctioned the refund to the assessee. The detailed analysis provided clarity on the issues of eligibility for availing credit of service tax and the computation of the one-year period for filing refund claims under Rule 5 of CENVAT Credit Rules, 2004.